Dubai’s booming demand for property has seen rents and house prices increase by 17% and 16% respectively in the past 12 months.
Property experts are pointing at a growing population and a fast-growing economy as being the main reasons for the rise.
The figures come from commercial property services firm CBRE Middle East which says there is also a limited supply of quality properties in prime locations.
“Higher rental growth is most apparent in Dubai’s established locations which have well-laid infrastructure and community facilities,” said a spokesman.
Though the average rent rise was 17%, some areas, like Palm Jumeirah and Jumeirah Beach Residence; The Greens and Downtown Dubai and Dubai Marina saw prices rocket 24%.
Property rents and prices up
As well as sustained population growth, the firm also says there is increasing demand from tenants and the positive economic performance is attracting more workers.
The average rent paid for a studio apartment in The Greens is £9,300 per year, up from £7,600 per year in January.
Two bed apartments have risen from £16,000 per year in January to a current rate of £18,600.
And while the average property price increased by 16%, some property developments in The Greens and Downtown Dubai saw asking prices rise by more than 20%, year on year.
In a bid to meet demand, CBRE says that around 36,000 new units will come onto the market between 2013 and 2015.
Another property services firm, Jones Lang LaSalle, has also highlighted Dubai’s real estate has having a real lure to foreign investors.
Prime investment destination
In an annual property market sentiment survey, the company says investors from the Middle East and North Africa (MENA) were being attracted by Dubai’s legal structure and transparency and its international appeal.
That interest, says the report, will make Dubai the ‘strongest performing real estate market’ in the region for the coming year.
And to underline the findings, property investment and management firm Cluttons says that high net worth (HNW) individuals from across the Gulf Cooperation Council region were seeing Dubai as their prime investment destination and their involvement will likely fuel price rises further.
“When it comes to regional investment activity it is clear that real estate assets continue to take precedence and Dubai is an attractive location and is benefiting as more investors look to build diverse asset portfolios,” says a report from the firm.
The report also disclosed that though Dubai is increasingly attracting HNW investors they are split on the types of property they want with 40% wanting residential property, 40% wanting hotels and leisure outlets and 20% wanting to buy retail and malls.